10/08/2003 @ 12:04PM

Medicine's Big Bottleneck

If health care companies and the U.S. government do not tread carefully, concerns about the cost of developing and providing treatments could derail medical innovation. That was the consensus among top industry and regulatory figures yesterday during speeches and interviews at the Medical Innovations Summit at the Cleveland Clinic.

Mark
McClella
Mark McClellan
, the medical economist who has served as head of the U.S. Food and Drug Administration for 11 months, argued that medical innovation has delivered more in economic terms than any other sector of the U.S. economy. But for both drugs and medical devices, he says, companies have been struggling to turn the scientific leaps made in research laboratories into actual products. The “development” in “research and development” is lacking. “There are a lot of research breakthroughs sitting on the shelf,” McClellan said in a speech. There is a need to turn the process of developing new products from an art to a well-understood science.

One fix McClellan is pursuing would be to open the FDA’s “mountains of data” on clinical trials to companies trying to figure out how to test their products. “We’re sitting on more information on what works and what doesn’t in clinical development than any other organization,” he said.

The FDA is also working on guidelines regarding exactly what its standards are for certain disease areas such as diabetes and obesity, and on how genetic data can be used to make studies smaller, faster and cheaper. The hope is that all this guidance will help reduce the cost of developing a new drug, which some estimates put as high as $800 million.

Still, McClellan noted that Americans are bearing high economic costs. “People are rightly angry,” he said. In the future, he hopes, costs might be partly alleviated by evaluating whether drugs will be covered by Medicare before they are approved, not after.

Chief executives of companies trying to create new drugs and devices were even more concerned about public outrage at the cost of products, and about the difficulty of getting new treatments to patients who need them.
Art
Collins
Art Collins
, chief executive of medical device maker
Medtronic
, ran through a list of devices his company makes to treat diseases–from heart problems to diabetes to Parkinson’s disease–that have reached less than 20% of the patients Medtronic thinks could be helped. (That hasn’t stopped the company from being a steady performer on Wall Street.)

Too often, Collins said, the debate over medical products is focusing narrowly on cost, without looking at the outcomes for patients. Also, he argued, device companies need to do more to communicate to patients that solutions to their ailments are out there.

Miles
White
Miles White
, the CEO of
Abbott Laboratories
, the Abbott Park, Ill.-based maker of health care products, was even more emphatic, saying the industry needed to shift the discussion from the cost of its products to their value. Drug and device companies, he argued, have reduced the number of deaths each year from heart disease and reversed the prognosis for AIDS, once an untreatable disease. But he too acknowledged that Americans are paying too much–partly because governments in other geographic areas, including Europe, are reluctant to pay for new products.

“Frankly,” White said, “this country is carrying a disproportionate load of the cost for the world.”

Even as drug and device makers tried to rally doctors around them, there was room for optimism in research.
Francis
Collins
Francis Collins
, the head of the National Human Genome Research Institute, predicted that in the next ten years, genetic tests would become a commonplace way for doctors to decide which drugs to prescribe. Moreover, he foresees a new generation of gene-targeted drugs emerging, like
Novartis
‘
Gleevec for chronic myelogenous leukemia. But he sees problems as well.

He worries that the road from gene to drug has become dotted with too many tollbooths, in the form of patents on basic research that make bringing a product to market too difficult. No one would argue that
Amgen
shouldn’t have a patent for the gene for erythropoietin, a protein that it sells under the brand name Epogen. But often, he says, basic research is being patented long before it can lead to a drug. The problem is at its worst when technology is discovered at a university and licensed to a single biotech, Collins says.

As an example, he points to
Genetic Technologies
, a tiny Australian company that has patented many parts of so-called “junk” DNA. “One really wonders how it is that benefits the public,” Francis Collins says. (For more on Genetic Technologies, and Collins’ beef with it, see “Junkyard Dogs.”)